Mike Preston

If I undeerstand what you have asked, AP gets everything (and maybe has a claim against the participant's estate and/or the plan for failure to elect a distribution option consistent with the QDRO).

What would you do if a participant never deferred and there were no employer contributions?

I think your description needs modification. A payment of $200 on an initial loan of $10,000 requires an interest rate of 7.677%. The outstanding loan is $6,153.57 not $6,000, on 3/31/2020. I think you only accumulate missed interest (not missed payments), which is $472.41, resulting in $6,625.98 as the amount to be amortized and a new payment of $215.35 from 3/31/2021 through 12/31/2023. Total payments are ($200 * 26) + ($215.35 * 34) = $12,521.90 versus the original $12,000. Therefore, the one year delay results in higher total payments of $521.90. Doing it your way results in an increase of about $3,000 rather than about $500. The one year delay costs a whole heck of a lot more. Anybody know what a bank would do? Anybody think what a bank would do matters? Doing it your way increases the outstanding principal on the reamortization date to be effectively higher by about 12 payments (roughly $200 * 12; about $2,400). That is, you are forcing the borrower to add roughly $2,400 in new principal, without any additional funds.

The winner!

True for EOY valuation dates, but not true for BOY valuation dates (120 days).

I can pretty much guess and I don't think the results in this case argue for a limit of less than $100,000. Guess 1: Tax reporting will show $101,000 as a taxable distribution. Guess 2: If Pat elects tax will be owed on the entire amount spread over three years, reduced of course by amounts rolled over as per the rollover provisions. Pat's fund shares is a red herring. Most people who take a distribution in this fashion will spend a good chunk of it on living expenses in the near future. Pat's assets are expected to dissapate.

Larry, check out this sentence from the OP's last post: "She’s enrolled in 4% deduction to get a 3.5% match."

A few things: Agree assets need to be held in trust. See Larry's message for what that means in this context. Your sentence that starts with "Just" is a false analogy. Of course the assets can be held in safe place under the control of the Trustee. I would prefer, as Larry says, that the safe deposit box be in the name of Trustee as Trustee for the plan, but I've never seen the IRS enforce that. Finally, this will be my last post on this topic. Please don't send me another secure message through my website. That is intended for clients. Paying clients. Or, at the least, potentially paying clients. 'Nuff said. Please don't clutter up this thread with an apology. None necessary.

Doesn't "any" mean "any and all"?

No.

JOH, you are missing one salient fact: a 1 participant, non-ERISA plan will, 99 44/100% of the time have the participant also be the Trustee.

Sure. Read the Internal Revenue Code and ERISA. You will find an absence of any provision restricting ownership/handling except in provisions that apply to IRA's. That which is not prohibited is allowed.

YW

No. Yes.

Your guess is as good as mine at this point. I'd be tempted to use 100k reduced by the highest outstanding balance in the last 12 months. I recognize that is a pretty conservative route.

If it was due on 4/15, it is extended to 7/15.

100%. With that said, this is a disaster waiting to happen. Why wait for the IRS to come in and say the election itself is flawed? It should include language as to what happens if the election amount exceeds comp.

Can't believe they would be out of luck. And if the current interpretation is that they would be, then the IRS will "clarify" things at some point to confirm the current interpretation is wrong. Betcha.

I've heard that concern before with respect to normal borrowing. Never seen the IRS or DOL assert a PT in the real world. Whatever probability you assign to the construct being a PT in the absence of CVD's, it is an order of magnitude less in this environment.

In the end, the PPP is a loan guaranteed by the government, but otherwise subject to whatever rules the bank imposes. So, if your banker says it has to be on a cash basis then it has to be on a cash basis.

They are public websites, right? If so, how about a link to the one that is wrong with respect to CARES?

Agreed

Can I get an "Amen"!!!???

Yes.

What document are you quoting from?